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Diversification remains the watchword

Is next recession edging closer?

02 October 2019

Our Chief Investment Officer talks about trade wars, Brexit, and the likelihood of a recession.

The current landscape

There has been a further escalation in the trade war between the US and China, as President Trump raised tariffs yet again. However, with the US campaign season for the 2020 elections now underway, we expect the president to dial down the rhetoric to avoid tipping the US economy into recession.

The Brexit situation remains fluid and uncertain, resulting in sizeable swings for sterling. While we cannot be certain of the eventual outcome, we expect the rate of UK trend growth to fall in the short term.

Despite a rate cut by the Federal Reserve and a global manufacturing sector feeling the strain, we aren’t seeing the major imbalances that were apparent before the last recession. Although we expect growth to continue, we’ve taken profits and reduced risk in portfolios over the past six months.

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Diversification remains the watchword

As part of our aim to keep you informed of our current investment views and how these themes affect your discretionary portfolios, Toby Cross, Head of Client Investment Solutions, talks to Will Hobbs, Chief Investment Officer, about trade wars, Brexit and the likelihood of a recession.

Things to consider

The value of investments can fall as well as rise. You may get back less than what you originally invested.